Energizing the Northwest Today and Tomorrow

1

Are We Building Enough Transmission?

• Energizing the Northwest Today and Tomorrow
• September 28, 2004
• Jim Fama
• Executive Director, Energy Delivery
• Edison Electric Institute

2
Normalized by Pk Dem Decline Since 1982
Source Eric Hirst, U.S. Transmission
Capacity Present Status, Future Projects
3
DATA AND PROJECTIONS SHOW SIMILAR TREND OVER 3
DECADES
4
U.S. Transmission Plans10 Year Projections
Source NERC Reliability Assessment Reports
5
IOU CAPITAL EXPENDITURES JUMPED LAST FOUR YEARS

Source Edison
Electric Institute
6
What Does The Data Show?

• Gap in growth rates between peak and transmission
  closing.
• Notable pickup in investment in last 2 years.
• Enormous variations in planning data among
  sources (Regional councils, utilities, RTOs,
  federal agencies, etc.)
• NERC data 95 of projects lt 100 miles (18 miles
  avg.).
• Mostly local reliability or interconnect of new
  gen and loads.
• Data on miles of transmission No data on
  equipment that adds capacity or control but no
  miles (transformers, switches etc.).
• Trends could reflect increased efficiency of
  transmission use and siting of gas-fired
  generators near load centers.
• Overall Not a sufficient indicator of
  transmission adequacy.
• http//www.ehirst.com/publications.html

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Regional State Committees

• Organization of MISO States / Southwest Power
  Pool RSC /
• New England States Committee on Electricity
  RSC
• EEI RSCs should facilitate state approvals for
  regional lines.
• Survey of Transmission Siting Practices in
  Midwest, jointly sponsored by EEI and OMS /
  issued Fall 2004
• Availability of one stop shopping varies.
• Half of states have statutory deadline, half do
  not.
• Most states believe they can consider regional
  needs.
• Preliminary recommendations
• States should take RTO plans into account in need
  cases.
• RSC should consider standardizing applications.
• Joint hearings, testimony, studies, data, etc.

8
DOE Designation of National InterestElectric
Transmission Bottlenecks

• Notice of Inquiry Comments filed September
  20th.
• EEI View
• Support DOE bringing attention to needed
  projects.
• We need this process in place if legislation
  passes.
• Difficulty with criteria for determining
  bottlenecks
• (1) National security (2) Reliability (3)
  Economic
• EEI Proposal
• No need for DOE to develop transmission planning
  or modeling function.
• Utilize existing transmission planning / data
  sources (RTOs, NERC, regional reliability
  councils, states).
• Have applicants make the case based on stuck
  projects.

9
Going Forward

• Data We need better data on transmission.
• Policy
• More transmission means more reliability,
  economic transactions and national security.
• All transmission models should be supported
• Integrated utilities / Indep. Trans. Cos. /
  Merchant trans.
• RSCs should focus on siting.
• Reg. certainty on pricing incentives, liability,
  cost recovery.
• Transmission incentives in energy legislation
  Backstop siting, lead fed. agency, accel.
  depreciation, capital gains.